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JPMorgan to pay victims of Madoff fraud

US federal authorities say JPMorgan Chase, the primary bank used by the jailed investor Bernard Madoff to run dubious pyramid schemes, has agreed to pay $1.7 billion to settle victims' claims.

The US attorney of the southern district of New York said Tuesday that the bank JPMorgan Chase would pay $1.7 billion to settle charges that it violated laws requiring banks to monitor customer activity for money laundering.

The deal includes a two-year deferment of prosecution against the bank. No individual executives were accused of wrongdoing.

Madoff, 75, who is currently serving a 150-year prison term, was arrested in 2008 as his hedge fund business fell apart amid the global financial crisis.

He was convicted in 2009 of defrauding investors.

Using so-called Ponzi schemes, Madoff relied on new cash intakes to pay clients cashing out. Hundreds of clients - ranging from celebrities to ordinary savers - lost their holdings.

The federal prosecutions statement said under the deal JPMorgan Chase would pay the fine to victims of Madoff's fraud, admit to its conduct, and had agreed to upgrade operations to prevent money laundering.

The bank had agreed not to apply for a tax deduction or tax credit for the $1.7 billion payment.

In exchange, criminal charges would be deferred for two years.

JPMorgan did not immediately comment on the settlement. It shares fell 55 cents to $58.45 in morning trading Tuesday.